Cisco (s CSCO) is looking to make its move into the consumer video chat market next week, with the introduction of new telepresence products priced to attract everyday users. But Cisco may have lost the video chat battle before it’s even begun; worse yet, it could undercut its own enterprise telepresence business with a consumer offering.
According to Kara Swisher at AllThingsD, Cisco will be introducing a line of consumer telepresence products next week that will be launched with — and possibly subsidized by — carriers such as Comcast (s CMCSA) and Verizon (s VZ). Products would cost as little as $200 with a heavily subsidized contract or $500 for a less subsidized deal.
In rolling out consumer telepresence products, Cisco will primarily be competing with web-based video chat offerings like Skype and Google’s (s GOOG) GTalk. Skype already has a robust consumer video chat business on the web, with more than 560 million users signed up. And Skype could rapidly expand that user base through an integration and partnership with Facebook that is rumored to be underway.
But the advantages that Cisco would have over an offering like Skype include dedicated hardware — so that the chat session is not just part of a web browser on someone’s laptop — and higher-quality streaming, the likes of which is not currently available through Skype or GTalk.
There’s some question of whether or not consumers would even want dedicated video chat hardware in the home, especially since many are just now cozying up to video chat on the web. For Cisco, this might actually be an idea and a product which is released well before its time. But as new services like Apple’s (s AAPL) FaceTime are released, the idea of high-quality video chat for consumers could catch on.
In the meantime, however, Cisco runs the risk of undercutting its own market for enterprise telepresence products. So far, its telepresence business has been focused on high-end equipment and whole-room video conferencing systems. By offering a product in the sub-$1000 range, some enterprise customers may decide to forgo pricey telepresence installations.
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